Grocery store giants Albertsons and Safeway to merge
Some big changes might be happening at your neighborhood marketplace. HLN reports two of the country's biggest grocery stores are merging.
'Do you have an Albertsons or a Safeway near you? Albertsons is buying Safeway. No stores are expected to close. So it could create a chain of 2,400 stores with a quarter million employees.'
MOUNTAIN VIEW, CA - MARCH 05: A sign stands outside of a Safeway store on March 5, 2014 in Mountain View, California. Private equity firm Cerberus Capital Management LP is reportedly close to finalizing a deal to purchase Safeway Inc., the nation's second largest grocery chain, for an estimated $9 billion. (Photo by Justin Sullivan/Getty Images)
Customers walk in front of a Safeway Inc. store in Denver, Colorado, U.S., on Thursday, Feb. 13, 2014. Safeway Inc. is scheduled to release earnings figures on Feb. 19. Photographer: Matthew Staver/Bloomberg via Getty Images
UNITED STATES - MARCH 15: An Albertsons store in Littleton, Colorado is pictured on March 15, 2005. Albertson's Inc., the second-largest U.S. supermarket chain, said fourth-quarter profit rose 49 percent, helped by an acquisition. The company's shares fell after Albertson's forecast 2005 profit below analysts' estimates. (Photo by Matthew Staver/Bloomberg via Getty Images)
Customer Tammy Ternoir, right, is checked out by Patrick Reed at Albertson's grocery store in Wilsonville, Ore., Tuesday, March 7, 2006. Albertson's Inc., the nation's second-largest supermarket chain, said its profit in the fourth quarter slumped 17 percent, weighed down by charges. (AP Photo/Rick Bowmer)
With that many stores, the chain is poised to become a major competitor to its rivals.
"The two companies say the merge will enable them to cut costs and offer competitive prices to consumers."
According to Bloomberg, the companies also expect the $9 billion deal will allow them to '...expand their reach amid mounting competition from Wal-Mart Stores Inc. and warehouse clubs, as well as online food sellers and delivery services.'
But one commenter on a KOMO article expressed concerns over the merger, saying:
'This is really bad news. Less competition means higher prices and less selection.'
KOMO did speak with one industry consultant- who thinks there's likely nothing to fear about the deal.
'I don't know that you're going to see them have the ability to actually raise prices in any way even though they'll be bigger and there will be more concentration.'
There are reports the Federal Trade Commission will likely require the newly merged chain to sell off some stores. If that's the case, others can buy them and diversify the market, keeping prices balanced.